Franchisees - An Example of When Things Go Wrong

Franchises are now a common feature of the business curriculum, and the textbooks generally paint a very positive picture of how they work.  But things can, and do, go wrong.  Here’s a great example....

Stock control - de-stocking was over £5bn in Q1 of 2009

Fascinating evidence from the Office of National Statistics about what happened to firms inventories during the first three months of 2009.  Data form the ONS estimates that the value of stocks held fell by £5.4bn during the quarter - a significant reduction.  Students might consider why this happened.  There will be a variety of causes:

- Deiberate attempts to reduce finished goods stocks by converting them into cash (perhaps by offering lower prices or promotional discounts)
- Closure (temporary or permanent) of production capacity
- Delays in ordering new raw materials and components as a way of conserving cash

Strategy in a recession - Fusion Systems

A terrific article and audio interview clip on the BBC site that makes a great resource for business students…

Video case study - Swine flu boosts demand

The media frenzy over swine flu has provided some good examples of businesses and organisations that suffer or benefit from an external shock such as a health scare.

Here is a short video that describes how a healthcare supplier has experienced a sudden increase in demand for its product range as a result of corporate concern over the swine flu outbreak.  A great example to use when it comes to explaining how demand can be affected by external factors.  Some good shots of sales orders in process and the warehouse too.

Download student worksheet (including video link)

Demand and supply in action - oil

A new market forecast from the International Energy Agency provides a useful example to use when helping students understand the interaction of supply and demand.

Q&A - What can a business do to improve cash flow?

The most important part of improving cash flow is having a reliable and up-to-date cash flow forecast.  This provides the information which highlights the main cash flow issues.

In terms of actions which management can take, here are the main options:

Improving cash flow by reducing stocks

An excellent piece in the FT yesterday focuses on how businesses are destocking as part of their cash-flow management in the downturn…

Video case study - LG moves away from mass production

A simply fantastic video clip explains how consumer products giant LG is moving to smarter, more flexible manufacturing processes as part of its strategy to address the substantial downturn in demand for consumer electronics.  Great footage of the production process; excellent examples of quality assurance and relevant too for students learning about why reducing stocks (working capital) is important in managing cash flow.  High recommended.

Download student worksheet (pdf) and video link

Excess stocks build as car demand falls

A super pictorial from the Guardian highlights the growing problem of excess stocks of finished motor vehicles....

Bracing ourselves for a series of retail business failures?

A bold (perhaps reckless) prediction in the Sunday Times today.  “Up to 15 national retail chains are predicted to go bust before the middle of January 2009"…